July 31, 2009

Real gross domestic product -- the output of goods and services
produced by labor and property located in the United States --
decreased at an annual rate of 1.0 percent in the second quarter of
2009, (that is, from the first quarter to the second), according to the
"advance" estimate released by the Bureau of Economic Analysis. In the
first quarter, real GDP decreased 6.4 percent.

And while 1% drop doesn't sound all that bad, the problem is that virtually all of this change came from government spending. Further, while the feds can continue to just print money and issue debt (as long as the Chinese let us, that is), the states have pretty much crapped-out - meaning there's one less spigot (or 50, actually) to be tapped going forward.

Read Denninger's column for the details - consumer spending in Q2 was down (up in Q1) as were both durable and non-durable goods (both were up in Q1).